FBR Capital Maintains a 'Market Perform' on hhgregg (HGG); F4Q11 Quick Take: EPS Ahead
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Price: $0.23 --0%
Rating Summary:
1 Buy, 8 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
Rating Summary:
1 Buy, 8 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 18 | New: 20
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FBR Capital maintains a 'Market Perform' on hhgregg (NYSE: HGG), PT lowered by $2 to $16.
FBR analyst says, "We question hhgregg's aggressive store growth plans, as financial metrics such as new store productivity are declining. Additionally, CE sector economics are not attractive enough to support an aggressive growth plan, as incremental volume is not translating to sales trends. With 62% of the store base new within the last five years, we would expect same-store sales to be better, as newer stores generally comp better than older ones. Additionally, the CE sector in general faces increasing competition from alternative classes of trade such as Wal-Mart (NYSE: WMT)(Not Rated), and the Internet, namely Amazon.com (Nasdaq: AMZN)(Not Rated) and Systemax (NYSE: SYX)(Not Rated), so we question the company's push to grow large brick-and-mortar stores. We point out that competitor Best Buy (NYSE: BBY)(Market Perform) recently reduced its plans for average square footage growth in response to the change in sector trends."
"We adjust our FY 2012E EPS estimate to $1.35 from $1.29 on the heels of the company's 4Q11 results. This compares with management's guidance of $1.20–$1.35 and the Street estimate of $1.29 (prior to the company's earnings release). For FY 2013, we adjust our EPS estimate to $1.54 from $1.49, which compares with the pre-earnings-release Street estimate of $1.50."
For more ratings news on hhgregg click here and for the rating history of hhgregg click here.
Shares of hhgregg closed at $15.24 yesterday.
FBR analyst says, "We question hhgregg's aggressive store growth plans, as financial metrics such as new store productivity are declining. Additionally, CE sector economics are not attractive enough to support an aggressive growth plan, as incremental volume is not translating to sales trends. With 62% of the store base new within the last five years, we would expect same-store sales to be better, as newer stores generally comp better than older ones. Additionally, the CE sector in general faces increasing competition from alternative classes of trade such as Wal-Mart (NYSE: WMT)(Not Rated), and the Internet, namely Amazon.com (Nasdaq: AMZN)(Not Rated) and Systemax (NYSE: SYX)(Not Rated), so we question the company's push to grow large brick-and-mortar stores. We point out that competitor Best Buy (NYSE: BBY)(Market Perform) recently reduced its plans for average square footage growth in response to the change in sector trends."
"We adjust our FY 2012E EPS estimate to $1.35 from $1.29 on the heels of the company's 4Q11 results. This compares with management's guidance of $1.20–$1.35 and the Street estimate of $1.29 (prior to the company's earnings release). For FY 2013, we adjust our EPS estimate to $1.54 from $1.49, which compares with the pre-earnings-release Street estimate of $1.50."
For more ratings news on hhgregg click here and for the rating history of hhgregg click here.
Shares of hhgregg closed at $15.24 yesterday.
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